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Presentation Material on MergerNovember 13, 2017
1
1. Overview of Merger
Significance of Merger p.4
Kenedix Residential Investment Corporation Current State; Challenges; and Advantages of Merger p.5
Japan Senior Living Investment CorporationCurrent State; Challenges; and Advantages of Merger p.6
Merger Scheme p.7
Schedule for Merger p.8
Overview of New Investment Corporation (New KDR) p.9
Earnings Forecast for New Investment Corporation (New KDR) p.10
Support System by Sponsor and Support Companies p.11
2. Post-Merger Growth Strategy
Growth Trajectory and Future Target p.13
Positioning in REIT Sector Specialized in Residential Housing, Healthcare Facilities and Hotels p.14
Operational Structure of New Investment Corporation (New KDR) p.15
Basic Strategies of New Investment Corporation (New KDR) p.16
Investment Policy of New Investment Corporation (New KDR) p.17
Residential Properties p.18
Healthcare Facilities p.19
Accommodation Facilities p.20
Major Pipelines p.21
Financing Strategy and Financial Condition p.22
Negative Goodwill p.23
Management Fee Structure of New Investment Corporation (New KDR) p.24
Appendix
Correlation between Asset Size and Distribution Yield inJ-REIT p.26
Stable Cash Flow of Healthcare Facilities p.27
ORE (Operator Real Estate) Strategy in Investment and Management of Healthcare Facilities p.28
Structure after Merger p.29
Portfolios of New Investment Corporation (New KDR) p.30-32
Overview of Each Investment Corporation p.33
Disclaimer p.34
Table of Contents
1. Overview of Merger
4
Significance of Merger
Increase in asset size/market cap and enhanced liquidity to secure growth
opportunities
With investment in a broad range of properties from residential to healthcare and accommodations (“spaces where people live and stay”), evolve into a new REIT pursuing stable income and continued growth
Assets are mutually complementary, increasing stability and allowing for
pursuit of growth
Improved asset management efficiency and enhanced financial health
Substantial advancement toward Y200bn in assets, a growth milestone
Increased chance of rating upgrade and being added to EPRA/NAREIT Global Index and other indices
Assets have different income characteristics and thus are mutually complementary, enhancing income stability
Assets have different investment cycles and thus are mutually complementary, allowing for pursuit of sustainable growth potential
Redundant costs are reduced to improve asset management efficiency
Lenders are increased and borrowing capacity is boosted
Strength Stable portfolio of Y160bn+ in assets, mostly rental housings
ChallengeChanges in supply and demand conditions in the
investment market for rental housings slowing external growth
Strength Expertise and track record in healthcare assets, a growth market
Challenge Small total asset size meanslost external-growth opportunities
5
Kenedix Residential Investment Corporation (“KDR”)Current State; Challenges; and Advantages of Merger
1. Increase in asset size and market capitalization
2. Mutual supplements by assets with different income characteristics will strengthen stability and expanded investment targets will promote external growth
3. Decrease in LTV will improve flexibility in financial strategies
4. Succeed Japan Senior Living Investment Corporation (“JSL”) properties, sponsor support and healthcare asset management platform
KDR: Current State
KDR’s challenges and advantages of the merger
Advantages of Merger
・ Slowed external growth potential due to changes in demand-supply environment in the rental housing investment market
Characteristics
IPO April 26, 2012
Invests Mainly In:
Rental housing
Rental housing with facility operators- Serviced apartments, elderly-care housing, company rental housing, student dormitories and apartments,
short-term apartments, etc.
Accommodation (hotels, etc.)
Other- Land with leasehold interests on which the buildings stipulated above exist and others
Portfolio (Note1) 115 properties; approx. 164.1bn yen
Position (Note2) Asset size: 6th among residential REITs
Market cap: 6th among residential REITs
Note 1: Total acquisition price as of Nov. 10, 2017. Excludes equity in silent partnerships (TKs). Note 2: Asset size is equal to aggregate acquisition price. Asset size and market cap as of October 31, 2017.
6
Japan Senior Living Investment Corporation (“JSL”)Current State; Challenges; and Advantages of Merger
Characteristics
IPO July 29, 2015
Invests Mainly In:
Senior living facilities– Fee-based home for the elderly, serviced housing for the elderly, etc.
Medical facilities– Hospitals, clinics, medical malls, intermediate nursing home, etc.
Portfolio (Note 1) 14 properties; approx. 27.9bn yen
Position (Note 2) Asset size: 2nd among healthcare REITs
Market cap: 3rd among healthcare REITs
1. Increased total asset size will improve liquidity; risk diversification will enhance income stability
2. Secure financing capacity will increase asset acquisition opportunities
3. Healthcare REIT philosophies and knowhow will be constructively succeeded
4. KFM’s (Note 3) “experience and knowhow” and JSLP’s (Note 3) “specialist expertise” will enhance healthcare asset
management capability
JSL: Current State
JSL’s challenges and advantages of the merger
Note 1: Total acquisition price as of November 10, 2017. Excludes equity in silent partnerships (TKs). Note 2: Asset size is equal to aggregate acquisition price. Asset size and market cap as of October 31, 2017.Note 3: KFM refers to Kenedix Real Estate Fund Management, Inc. (KDR’s asset management company); JSLP refers to Japan Senior Living Partners, Inc. (JSL’s asset management company)
Advantages of Merger
・ Small total asset size has led to low investment unit prices and loss of external growth opportunities・ Healthcare assets have low recognitions since there are still at the early stages
7
New REIT Name
Kenedix Residential Next Investment Corporation(to be renamed; “New KDR”)
Merger Type
Absorption-type merger
Merger Ratio
KDR:JSL=1:1(For every JSL investment unit, allocate 1KDR investment units*)∗ To ensure that at least one KDR investment unit will be
allocated to every JSL unitholder, KDR plans an investmentunit split (1 : 2), with allocations to be made with the post-splitratio.
∗ For reference: the merger ratio based on the pre-split KDRinvestment unit number is KDR:JSL=1:0.5
Resolutions at Unitholders’
Meetings
• Assumes that JSL unitholders will approve a resolution relatingto approval of the Merger Agreement (special resolution (Note
1))
• KDR unlikely to require merger approval as it falls under ashort-form merger (Note 2)
AssetManagement
Company
• Will manage assets for New KDR
• No merger planned for JSLP and KFM
Note 1: Attendance by unitholders holding a majority of outstanding investment units and approval by at least two-thirds of the voting rights of attending unitholders. If there is no conflicting resolution, deemed assent willapply.
Note 2: If the surviving investment corporation issues to the unitholders of the dissolving investment corporation no more than one-fifth (20%) of the outstanding investment units of the surviving investment corporation, ashort-form merger will be available.
Note 3: In principle, limited to support concerning health care asset management. For details of support to be succeeded on the day the merger takes effect, see P.11 “Support Framework by Sponsors and Support Companies. ”Details of support subject to change after the Merger”. In addition to the support companies listed herein, KDR has a support agreement on residential properties with Jukyo Holdings Co., Ltd.
JSLP
JSL (dissolving)
AM Agreement
Shinsei BankHASEKO Corp. LIXIL Group SOMPO HoldingsMitsubishi UFJ Trust and
Banking Corp.
New KDR
KFM
AM Agreement
60% 40%
KFM
KDR (surviving)
AM Agreement
Kenedix
100%
Shinsei BankHASEKO Corp. LIXIL GroupMitsubishi UFJ Trust and
Banking Corp.
100%
Kenedix
Asset ManagementCompany
Sponsor
Support companies
Merger
Merger Scheme
Asset ManagementCompany
Sponsor
• External growth support
• Internal growth support
• Financial support • Personnel support
etc.
Surviving REIT Kenedix Residential Investment Corp. (KDR)
Dissolving REIT Japan Senior Living Investment Corp. (JSL)
(Note 3)
8
Schedule for Merger
Merger Agreement Executed
Record Date for Unitholders’ Meeting
Unitholders’ Meeting
Book-Closing
End of Deemed Fiscal Period
Merger Takes Effect
Distribution Paid
First Post-Merger Book-Closing
KDR JSL
Delisting
Merger Consideration(Note 2)
Being Paid
November 10, 2017
November 30, 2017 November 30, 2017
January 25, 2018(Resolutions: Partial amendment to the Articles of Incorporation,
etc. (Note 1))
January 25, 2018(Resolutions: Merger Agreement approval, etc.)
February 28, 2018(September 1, 2017 to February 28, 2018)
Mid-April 2018(12th Fiscal Period ended January 31, 2018)
Mid-May 2018
July 31, 2018(13th Fiscal Period ending July 31, 2018)
March 1, 2018
Note 1: JSL’s executive director and one of its supervisory directors are expected to join post-merger KDR as an executive director / supervisory director; procedures will be carried out for approval of such appointment as well.Note 2: In lieu of cash distributions for the JSL’s fiscal period from September 1, 2017 to February 28, 2018, New KDR plans to pay merger consideration inclusive of cash distributions for that period.
January 31, 2018(12th Fiscal Period ending January 31, 2018)
February 26, 2018
9
Overview of New Investment Corporation (New KDR)
KDR JSL New KDR(estimate as of March 1, 2018)
Asset size (acquisition price)(Note 1)
164,169 million yen 27,965 million yen 193,114 million yen
Properties (Note 1) 115 properties 14 properties 129 propertiesNOI Yield (Note 2) 5.5% 6.0% 5.6%
Average Age of Buildings (Note 1)
11.2 years 17.6 years 12.2 years
Occupancy Rate (Note 3) 96.9% 100% 97.7%LTV (estimation) (Note 1) 51.6% 42.5% 50.1%Interest-Bearing Debt
(Note 1) 91,130 million yen 15,000 million yen 106,130 million yen
NAV per Unit (Note 4) 304,814 yen 203,993 yen311,923 yen
(after the Investment Unit sprit: 155,961 yen)
Net Assets per Unit(Note 4) 236,498 yen 183,265 yen
250,786 yen(after the Investment Unit sprit:
125,393 yen)Note 1: Pre-merger figures for the investment corporations as of November 10, 2017 are shown. The total amount based on the acquisition price of KDR assets as of November 10, 2017 and price at which KDR is expected to
succeed to JSL assets as of November 10, 2017 is shown as the asset size of New KDR, not the a price at which New KDR will succeed to JSL assets at the time of merger.Note 2: “NOI yield” was calculated by dividing the appraisal NOI in the most recent appraisal report by the asset size (acquisition prices).Note 3: “Occupancy rate” as of the end of September 2017 is shown.Note 4: Pre-merger figures for the investment corporations as of published statements (KDR: end of July 2017; JSL: end of August 2017) are shown. “NAV per unit” and “Net assets per unit” were calculated after deductions of
distributions. Post-merger “NAV per unit” and “net assets per unit” include negative goodwill of 3,283 million yen estimated based on the investment unit price as of October 31, 2017.
Pre-merger(Note 5) New KDR(Note 6)
KDR: Forecast for the Fiscal Period ending January 2018JSL: Forecast for the Fiscal Period ending February 2018
Forecast for the Fiscal Period ending July 2018
Forecast for the Fiscal Period ending January 2019
Expected Distributions per Unit
KDR 6,800 yen(after the Investment Unit sprit: 3,400 yen) 3,570 yen
(+5.0%)3,610 yen
(+6.2%)
JSL 3,500 yen (+2.0%) (+3.1%)Note 5: Pre-merger figures as of September 14, 2017 for KDR and as of October 16, 2017 for JSL. Proposed date of Investment unit split of KDR is March 1, 2018 and the figures after the investment unit sprit is provided here
for the comparison purpose.Note 6: Variances in parentheses were obtained by dividing expected distributions per unit of New KDR by expected distributions per unit after merger ratio adjustment for each investment corporation.
(for KDR, the amount after the investment unit sprit)
10
13th Fiscal Period (ending July 31, 2018) forecast (a)
14th Fiscal Period(ending January 31, 2019) forecast (b)
Variance(b)-(a)
Operating revenues 6,580 million yen 6,730 million yen +150 million yen
Operating income 2,970 million yen 3,397 million yen +427 million yen
Ordinary income 2,411 million yen 2,827 million yen +415 million yen
Net income(Note 2) 5,694 million yen 2,826 million yen -2,868 million yen
Total distribution(Note3,4) 2,795 million yen 2,826 million yen +31 million yen
Net income per unit 7,273 yen 3,610 yen -3,663 yen
Distributions per unit 3,570 yen 3,610 yen +40 yen
Properties 129 properties 129 properties 0 properties
Earnings Forecast for New Investment Corporation (New KDR)
Note 1: No change (acquisition of new properties, disposal of Operating Assets, etc.) was assumed for the real properties and the real property trust beneficiary interests that both investment corporations hold as of November10, 2017 (129 properties in total; “Operating Assets”) until the end of July 2018. In actuality, change may occur due to acquisition of new properties other than Operating Assets, disposal of Operating Assets, etc.
Note 2: Net income for the fiscal period ending July 31, 2018 including 3,283 million yen (estimate) in negative goodwill gain to be recorded from the Merger estimated based on the price per unit of KDR as of October 31, 2017.Note 3: For total distributions for the fiscal period ending July 31, 2018, it is assumed that negative goodwill gain in an amount equal to the impact of the merger compensation and merger-related expenses, etc. will be applied
to net income, after deducting the negative goodwill gain, of 2,410 million yen, and a total of 2,795 million yen will be distributed.Note 4: With respect to the portion of the negative goodwill set forth in the assumptions for extraordinary gain that will not be applied to distributions for the Fiscal Period ending July 31, 2018, the majority of such unapplied
portion (the amount necessary for satisfying pass-through requirements) will be set aside as reserves for adjusting for one-time differences as stipulated in the rules concerning investment corporation calculations; andprovided that there is a balance in the reserves, a specific amount will be reversed every term and applied to distributions. However, given that the amount of negative goodwill is unconfirmed at this point, the amountof reserves for one-time difference adjustment is also unconfirmed, and accordingly such reversals were not taken into account in calculating such forecasted distributions.
11
External growth support Internal growth support
SponsorSupport Com
panies
Combine advanced expertise of Sponsor and Support Companies of KDR and JSL for continued growth of New KDR going forward.
Development (Note 3)
Information provision (Note 2) Warehousing
Personnel support or
provision of expertise
Renovations, maintenance
Backup operator (Note 4)
__
Finance supportFinancing means for
bridge funds, etc.provided
Support System by Sponsor and Support Companies
(Note 1)
(Note 1)
(Note 1)
(Note 1)
Residential properties Healthcare facilities AccommodationSupport for:
Note 1: It was agreed on the Merger Agreement execution date that the sponsor / support agreement executed by and among JSL, JSLP and 4 current sponsor companies of JSLP will terminate on the condition of the Mergertaking effect and will be succeeded as a support agreement with New KDR and KFM.
Note 2: “Information provision” means support to provide, to New KDR or KFM under certain conditions, information on sales of third parties’ real properties, etc. that Sponsor or individual Support Companies obtain on theirown or information on sales of real properties that Sponsor, individual Support Companies or their group companies, etc. possess (with respect to Shinsei Bank and Mitsubishi UFJ Trust and Banking Corporation amongother Support Companies, only information on sales of third parties’ real properties, etc. that they obtain on their own).
Note 3: “Development” means support to provide cooperation to the extent practically reasonable and under practically reasonable conditions when New KDR requests support for new development of investable assets orredevelopment of real properties, etc. that New KDR possesses or considers to acquire.
Note 4: “Backup operator” means support to consider to be backup operators for existing operators who are managing facilities which are located on real properties, etc. that New KDR possesses or considers to acquire whenNew KDR requests.
Note 5: This is limited to the provision of expertise, and personnel support is not included.Note 6: The chart above shows a summary of support set forth in each support agreement executed by and among Sponsor, each of the Support Companies and KDR/KFM or agreeing succession resulting from the merger.
Neither the Sponsor nor the individual Support Companies are necessarily contractually obligated to provide the support above, and Sponsor and the individual Support Companies have not guaranteed or promised toprovide the support above. The information above is valid as of November 10, 2017, which is subject to change in the future.
(Note 5)
2. Post-Merger Growth Strategy
13
30.4 30.4 30.4
99.0 100.3 122.1
145.8 148.1 148.1 155.0 155.0 164.1
193.1 billion yen
300 billion yen
27.9 27.9 27.9 27.9 27.9 27.9
2012.7 2013.1 2013.7 2014.1 2014.7 2015.1 2015.7 2016.1 2016.7 2017.1 2017.7 2018.1 2018.3
Growth Trajectory and Future Target
Individual growth of each investment corporation New growth as new investment corporation
As a comprehensive REIT with a portfolio of residential, healthcare and accommodation facilities, New KDR will aim to reach 300 billion yen in themedium term and further expand asset size in the long term.
Asset size (acquisition price base) (unit: billion yen)
7/2012(1st Fiscal
Period end)
1/2013(2nd Fiscal
Period end)
7/2013(3rd Fiscal
Period end)
1/2014(4th Fiscal
Period end)
7/2014(5th Fiscal
Period end)
1/2015(6th Fiscal
Period end)
7/2015(7th Fiscal
Period end)
1/2016(8th Fiscal
Period end)
7/2016(9th Fiscal
Period end)
1/2017(10th FiscalPeriod end)
7/2017(11th FiscalPeriod end)
1/2018(12th FiscalPeriod end)(estimate)
3/2018
KDR JSL New KDR
KDR 1st public offering
KDR 2nd public offering
KDR 3rd publicoffering
KDR listing
JSL listing
Merger
Medium-term target
Aiming Further growth
Note 1: Because the asset size of each of KDR and JSL was rounded down to the nearest 100 million yen, the sum of KDR and JSL asset size may not match the relevant total in the chart above. The total amount based on the acquisition price of KDR assets as of November 10, 2017 and price at which KDR is expected to succeed to JSL assets as of November 10, 2017 is shown as the asset size of New KDR, not the price at which New KDR will succeed to JSL assets at the time of merger.
Note 2: JSL’s fiscal periods end at the end of February and August each year in the chart above.
14
19.3 26.8 27.9 38.4 50.9 51.5 80.9 102.0 113.4 164.1 188.5 193.1 206.9 225.9
301.5 319.4 339.2
442.7
NHI SPA JSL HCM IHR SRR SPR MTH HRR KDR CRR 新KDR SHI JRH NAF JHR INV ADRNHI(3308)
SPA(3472)
JSL(3460)
HCM(3455)
IHR(3463)
SRR(3459)
SPR(8979)
MTH(3478)
HRR(3287)
KDR(3278)
CRR(3282)
SHI(8973)
New KDR(3278)
JRH(8986)
NAF(3226)
JHR(8985)
INV(8963)
ADR(3269)
11.6 12.0 16.0 18.7 24.9 29.2 40.4 69.5
94.4 101.5 113.2 122.8 128.9 131.1
212.4 218.9
301.2 360.8
JSL NHI SPA HCM SRR IHR SPR MTH HRR KDR 新KDR SHI JRH CRR NAF INV JHR ADR
Positioning in REIT Sector Specialized in Residential Housing, Healthcare Facilitiesand Hotels
新投資法⼈としての新たな成⻑
In the REIT sector of residential housing, healthcare facilities and hotels, the post-merger investment corporation will have the 7th largest asset sizeand the 8th largest market capitalization among the 16 brand name REITs. New KDR will aim to reach 300 billion yen in the medium term and furtherincrease its positioning.
Note 1: Because the asset size of each of KDR and JSL was rounded down to the nearest 100 million yen, the sum of KDR and JSL asset size may not match the relevant total in the chart above. The total amount based on theacquisition price of KDR assets as of November 10, 2017 and price at which KDR is expected to succeed to JSL assets as of November 10, 2017 is shown as the asset size of New KDR, not the price at which New KDR willsucceed to JSL assets at the time of merger
Note 2: The asset size based on the data as of November 10, 2017 for KDR and based on the data as of October 31, 2017 for the other investment corporations .Note 3: Investments in silent partnerships (TKs) and Japanese SPCs (TMKs) are not included in the asset size.
(billion yen)
193.1 billion yen in assets7th among 16 REITs
113.2 billion yen in market cap8th among 16 REITs
Asset size (acquisition price base)
Market capitalization
REITs (abbreviations and securities code) are color-coded in blue for residential housing REITs, yellow for healthcare REITs and brown for hotel REITs.
(billion yen) REITs (abbreviations and securities code) are color-coded in blue for residential housing REITs, yellow for healthcare REITs and brown hotel REITs.
NHI(3308)
SPA(3472)
JSL(3460)
HCM(3455)
IHR(3463)
SRR(3459)
SPR(8979)
MTH(3478)
HRR(3287)
KDR(3278)
CRR(3282)
SHI(8973)
New KDR(3278)
JRH(8986)
NAF(3226)
JHR(8985)
INV(8963)
ADR(3269)
15
Operational Structure of New Investment Corporation (New KDR)New KDR will have the operational structure set forth below. A Healthcare Investment Management Division (tentative name) will be created withinKFM’s Residential REIT Department, and JSLP personnel will be taken on to make the best use of expertise and experience with management ofproperties in each asset class and establish a more flexible and efficient operational structure.
Note: The contents on this slide are subject to change because an organizational decision regarding KFM has not been made.
In conjunction with the Merger, a “Healthcare Investment Management Division (tentative name)” will be formed in KFM Residential REIT Department.
– To handle and manage investment in healthcare facilities
– To take on department managers and staff from JSLP investment management departments, approximately 5 staffers in total, including employees seconded from Shinsei Bank, a Support Provider for the new investment corporation
– To take over expertise and experience relating to the management of healthcare facilities, a new asset class, from JSLP
Shareholders’ meeting
Corporate AuditorsBoard of D
irectors
Chairman,
Representative Director
President & CEO
Compliance Com
mittee
Internal Audit Dept.
Compliance O
fficer/Compliance
Dept.
Office REIT Dept.
Residential REIT Dept.
Residential REIT Dept.Asset Management
Committee
Private REIT Dept.
Retail REIT Dept.
Private Fund Dept.
Finance &Accounting
Dept.
Business Administration
Dept.
Asset Investment Div.
Asset Management
Div.Healthcare Investment
Management Div.(new)
Planning Div.
Overview of asset management company
Organizational structure
Organizational chart
Name Kenedix Real Estate Fund Management, Inc.
Representative Masahiko Tajima, President & CEO
Capital 200 million yen
Book-closing December
Shareholder Kenedix Inc. (100%)
(Keisuke Sato, Head of Residential REIT Department.)
16
Efficient profit management
Management capabilities of residential properties
Maintenance and improvement of management by establishing strong trust relationships with operators
Diversification of lenders and appropriate control of interestsand loan periods
Basic Strategies of New Investment Corporation (New KDR)Engage in real estate investment management with “flexibility” and “dynamics” on the basis of Kenedix Group’s “consistent external growth by making good use of judgment,” “efficient profit management” and “challenging new business opportunities” to secure stable rental income and steady growth of assets
Stable earning of income from rent business and steady growth
Property investment management with “flexibility” and “dynamics”
Residential properties, healthcare facilities, accommodation facilities
Consistent external growth by making use of good judgment
Residential properties– Judgment to see potential earning power of land
Healthcare facilities– Judgment to analyze operators’ management
philosophy, management power and growth potential
Accommodation facilities– Judgment to analyze balance between location and
room charges and operators’ management power
Challenge to new business opportunities
Improvement of Kenedix brand– Further enhancement of the recognition of
“KDX Residence”
Kenedix partnership– Collaboration with Support Providers such as
Shinsei Bank and capable operators for stable management of healthcare facilities and hotels and expansion of pipelines
17
Investment Policy of New Investment Corporation (New KDR)New KDR will diversify investment on the basis of the allocation rates below, though residential properties including Rental housings will remain themain investment target.
KDR JSL New KDR
KDR JSL New KDR
Healthcarefacilities
15%
Other1%
Others1%
KDR
Rental housing 80% - 100%
Rental housing withfacility operators 0% - 20%
Accommodation (hotels, etc.) 0% - 20%
Other 0% - 20%
JSL
Senior living facilities 70% - 100%
Medical facilities 0% - 30%
New KDR
Residential properties
60% and over
Healthcare facilities
20% and lower
Accommodation facilities
20% and lower
Other* 10% and lower
*Other means Land with a leasehold where the buildings above are located (limited proprietary right of land), etc.
New KDR
Tokyo MetropolitanArea
50% and over
Major cities of Tokyo, Kanagawa, Saitama and Chiba
Investment target
Investment area
Portfolio breakdown by investment target (Note 1,2)
Portfolio breakdown by investment area (Note 1,2)
Residential properties84%
Fee-based home for the elderly
(with nursing care)78%
Fee-based home for the elderly
(residence)17%
Serviced housing for the elderly
5%
Rental housing97%
Rental housing with facility operators
2%
Other1%
Tokyo Metropolitan Area70%
Other Regional Areas 30%
3 Metropolitan Areas75%
Regional Urban Areas14%
Other11%
Tokyo Metropolitan Area36%
Other Major Cities59%
Others5%
Tokyo Metropolitan Area65%
Other Regional Areas34%
Note 1: Portfolio diversifications by Investment Target and Investment Area were calculated on the basis of acquisition price for properties owned by KDR and JSL. The price at which New KDR is expected to succeed to propertiesowned by JSL is used with respect to properties owned by New KDR as of November 10, 2017.
Note 2: “Other Regional Areas” means local cities such as ordinance-designated cities. “3 Metropolitan Areas” means Tokyo Metropolitan Area, Osaka area and Nagoya area, and “Regional Urban Areas” means ordinance-designatedcities, core cities and special cities outside the 3 Metropolitan Areas.
18
Residential PropertiesWhile rents in the housing market are very stable, compared with other assets, yield has lowered in recent years amid fierce acquisition competition.Under such circumstances, New KDR will strive to grow by acquiring assets with bridge funds, mutual buying and selling and forward commitmentand making the best use of Sponsor support pipelines.
4.0%
5.0%
6.0%
7.0%
8.0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
70
80
90
100
110
120
130
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
店舗賃貸 事務所賃貸 ⺠営家賃⺠営家賃
Rental housing market is very stable.
Current status of the rental housing market
Trends in rents according to use of real property
Source: The Bank of Japan “Corporate service price index,” Ministry of Internal Affairs and Communications“Consumer price index”
Note: Setting 1990 as 100, private rents are shown in index, based on figures in Ministry of Internal Affairs and Communications “Consumer price index” and office and store rents are shown in index, based on figures in the Bank of Japan “Corporate service price index”.
Source: Created on the basis of J-REIT disclosure documentsNote: Capitalization rates used in appraisals as of property acquisition dates were used for appraisal cap rates;
the pink line shows a curve approximation of the fifth order.
As acquisition competition intensifies, yield is gradually lowering.Trends in appraisal cap rates as of acquisition of J-REIT rental housing
External growth strategy
KDR tactical acquisition strategy and knowhow– Acquisition by using mutual buying and selling and forward
commitment
Sponsor pipelines– Acquisition by using Sponsor support such as properties developed
and owned by Sponsor
Internal growth strategy
Internal growth through management to increase valueMeasures to improve management performance– Regular validation of proper management criteria and cost
reduction– PM consolidation, reduction of management cost by establishing
relationships– Implementation of mid-term and long-term cost reduction
measures by introducing energy-saving equipment, etc.
Area Mainly in Tokyo Metropolitan Area
Investment policy
Focus on potential earning power of land, based on status, convenience and special marketSelect dwelling unit types suitable for land characteristics
Scale 300 million yen and over
LocationHigh-status areaHighly convenient areaSpecial market, area
Other investment
criteriaDwelling types: studio, small family, family
Investment policy and criteria
Growth strategy
Private rents Office rents Store rents
19
2,104 2,846 3,569 4,373 6,232 6,244
7,563 8,499 124,610
155,612 183,295
208,827 235,526
271,286
315,678 349,975
0
2,000
4,000
6,000
8,000
10,000
0
100,000
200,000
300,000
400,000
2006 2007 2008 2009 2010 2011 2012 2013
施設数(右軸) 入居定員(左軸)
Healthcare FacilitiesNew KDR will strive to secure continuous growth and stable profit with an external growth strategy such as ORE (Operator Real Estate) strategy (Note 1)
and support agreements with Shinsei Bank, etc. and an internal growth strategy such as proposals for improvement and repair through monitoringand proposals and discussions of management and marketing methods.
Area Diversified investment in Tokyo Metropolitan Area and Other Major Cities(some investment in other areas)
Investment target Mainly in senior living facilities and medical facilities
Investment policy
Selectively invest, in principle, in properties with long-term lease agreements with fixed rents executed with operators with goodcreditworthiness and management experience
Scale 300 million yen and over
Location Comprehensive consideration, taking area, scale, nature of business content, etc.
Operator selection criteria
Management philosophy (history of establishment, managerʼs “backbone”, etc.)
Business history, business contents (business scale, scandals)
Financial credit capability (B/S, profit-loss status, CF, etc.)
Number of fee-based nursing homes and capacity are steadily increasing.
Current status of the healthcare market
Transitions in fee-based nursing home applications
Investment policy and criteria for healthcare facilitiesSource: Ministry of Health, Labour and Welfare
Note 1: For details of ORE strategy, see P.28 “ORE (Operator Real Estate) Strategy in Investment and Management of Healthcare Facilities”Note 2: Support limited in principle to support relating to investment management of healthcare assets. Please see P.11 “Support System by Sponsor and Support Companies” for details of support to be succeeded on the
merger effective date. The support details are subject to change after the merger. In addition to the support companies on this slide, KDR has entered into a support agreement relating to residential properties withJukyo Holdings Co., Ltd.
Succession of JSL investment philosophy
“We contribute to society, as a bridge between the capital market and healthcare industry, by providing a wide range of support for growth of the healthcare industry and maximizing
satisfaction of users, operators and unitholders who are stakeholders in JSL.”
Growth strategy
External growth strategy
ORE strategy and multi-pipelines– Use of operators’ information on owner change deals, sale and
leaseback deals and new development deals– Acquisition of future medical facilities (hospitals, etc.) and further
expansion of portfolios
Acquisition strategy based on support agreements– First refusal rights and deal information from Shinsei Bank,
Mitsubishi UFJ Trust and Banking Corporation, HASEKO Corporation, LIXIL Group, etc. other than KDX as the sponsor.
Internal growth strategy
Proposals of improvement and repair through monitoring and proposals and discussions of management and marketing methods
Measures to maintain and improve asset value with additional strategic investment, based on operator needs, through ORE strategy
<Support contents (Note 2)>
• Human support• Pipeline support• Backup operator• Financial support
In addition to Kenedix, JSL Sponsor will continue to serve as an Support Company.
Support agreement
(building)# of facilities (right)Capacity (left)(people)
20
6,218 8,358
10,363
13,413
19,737
24,039
0
10,000
20,000
30,000
2011 2012 2013 2014 2015 2016
総数 観光客 商⽤客 その他
386 399 413 432 429 438 423
28 18
26 33
45
66 69
0
100
200
300
400
500
2010 2011 2012 2013 2014 2015 2016
⽇本⼈延べ宿泊者数 外国⼈延べ宿泊者数
Accommodation FacilitiesAs demand for accommodation facilities increases, New KDR will strive to secure stable profit by using pipelines, etc. developed by Sponsor and, in principle, incorporating properties with lease agreements with fixed rents executed with operators.
External growth strategy
Use of pipelines developed by Sponsor
Acquisition of properties which secure stable profit, with fixed rents
Internal growth strategy
Improvement of earning power through aggressive asset management– Revision of rent schemes, remodeling with strategic capital
expenditures, change of branding, etc.
Area Diversified investment in Tokyo Metropolitan Area and OtherMajor Cities (some investment in other areas)
Investment policy
Focus on locations (access to business areas, tourist areas or access to tourist spots)
Selectively invest, in principle, in properties with long-term lease agreements with fixed rents executed with operators with goodcreditworthiness and management experience
Scale 500 million yen and over
Location Comprehensive consideration, taking area, scale, nature of business, etc. into consideration
Other investment
criteria
Mainly invest in accommodation facilities (hotels, etc.) with Western style structures and equipment (including subsidiary facilities)
Growth strategy
Investment policy and criteria for accommodation facilities
Increase in the number of guests, especially inbound guests, at domestic accommodation facilities
Current status of the hotel market
Changes in Number of foreign visitors to Japan
Source: The Japan National Tourist Organization (JNTO).
Increase in demand for accommodation facilitiesChanges in Guests at domestic accommodation facilities
(thousand people) Total TouristsCommercial visitors Other
Cumulative number of Japanese guests
Cumulative number of foreign guests
Source: Japan Tourism Agency “Statistics on Trips Involving Lodging”
(million people)
21
Major Pipelines
Address Nishinomiya-shi, Hyogo
Leasable units 238Appraisal
value 7,300 million yen
KDX Residence Shukugawa Hills KDX Residence Asagaya
Address Suginami-ku, Tokyo
Leasable units 44Appraisal
value 2,080 million yen
Address Yokohama-shi, Kanagawa
Leasable units 92Appraisal
value 2,560 million yen
KDX Residence Hiyoshi Serenite Kobe Motomachi
Address Kobe-shi, HyogoLeasable units 138
Appraisal value 2,540 million yen
Address Kobe-shi, HyogoNumber of
rooms 40
Appraisal value 1,930 million yen
Canadian Hill Anesis Hyogo
Address Kobe-shi, HyogoNumber of
rooms 58
Appraisal value 1,480 million yen
Address Kobe-shi, HyogoNumber of
rooms 135
Appraisal value 2,940 million yen
Orage Suma Rococo-riha
Address Toyonaka-shi, Osaka
Number of rooms 52
Appraisal value 2,190 million yen
Address Osaka-shi, OsakaNumber of
rooms 145
Appraisal value 3,720 million yen
Anesis Teradacho
Address Minato-ku, Tokyounits 400
Completion February 2017
Remm Roppongi
Address Naka-ku, Nagoya-shi
units 175Completion January 2018
Address Chuo-ku, Sapporo-shi
units 151Completion May 2018
Address Ginza, Chuo-kuunits 121
Completion March 2019
Residential properties Healthcare facilities Accommodation facilities
Note 1: New KDR is not planning to acquire the properties above as of November 10, 2017, and there is no guarantee for New KDR to acquire in the future. “Preferential negotiation right” mentioned above including the caseNew KDR allows negotiation with the same priority level with others as well as the case allows exclusive negotiation. Acquisition of above properties by New KDR have not guaranteed by such agreement.
Note 2: The three uncompleted properties in the accommodation facilities column show planned figures as of November 10, 2017.Note 3: The appraisal values of the residential properties are as of July 1, 2017 (June 30, 2017 in case of KDX Residence Shukugawa Hills), and those of the healthcare facilities are as of the end of February 2017.
22
Lender Amount (million yen) Ratio
Sumitomo Mitsui Banking Corporation 31,230 30.3%
Bank of Tokyo-Mitsubishi UFJ 19,300 18.7%
Aozora Bank 9,650 9.4%Mizuho Bank 7,650 7.4%
Risona Bank 7,600 7.4%
Development Bank of Japan 7,500 7.3%
Shinsei Bank 5,350 5.2%
Sumitomo Mitsui Trust Bank 4,450 4.3%
Mizuho Trust & Banking 4,400 4.3%
Mitsubishi UFJ Trust and Banking Corporation 4,000 3.9%
Sompo Japan Nipponkoa Insurance 1,000 1.0%
Nippon Life Insurance Company 500 0.5%
Bank of Fukuoka 500 0.5%
Financing Strategy and Financial Condition
Note 1: Based on borrowings as of November 10, 2017.Note 2: LTV of New KDR was calculated by dividing the total amount of interest-bearing as of the Merger effective date by total assets. The total assets as of the Merger effective date was calculated by including 3,283 million
yen of negative goodwill that is expected to arise on the basis of the investment unit price as of October 31, 2017.
Diversification of financing– Continuously issue investment units though careful about dilution of investment units– Continuous finance from investment corporation bonds for a certain percentage of debts
Debt management focusing on balance between periods and costs– Strive to distribute repayment dates by efficiently mixing stable long-term capital with
agile short-term capital.– LTV level targets currently at 50-55%.
KDR JSL
Total amount of interest-bearing 91,130 million yen 15,000 million yen
LTV (Note 2) 51.6% 42.5%
Fixed interest ratio 95.5% 93.3%
Average interest rate 1.10% 0.92%
Average remaining term 5.4 years 2.7 years
New KDR will make a strong and stable financial foundation based on formation from Banks such as Sumitomo Mitsui Banking Corporation and the Bank of Tokyo-Mitsubishi UFJ, Ltd., etc.
Interest-bearing (Note 1)
Diversification of repayment terms (Note 1)
Bank formation
(million yen)
2,630
11,000
1,500 1,500 3,600 2,350
7,650 7,500
2,750 4,500 4,300 5,500 5,650 5,500 7,000
4,500 4,500 6,200
4,500 6,000
4,500 1,000
1,000
1,000 0
5,000
10,000
15,000
2018.7 2019.1 2019.7 2020.1 2020.7 2021.1 2021.7 2022.1 2022.7 2023.1 2023.7 2024.1 2024.7 2025.1 2025.7 2026.1 2026.7 2027.1 2027.7 2028.1 2028.7 2029.1
KDR JSL 投資法⼈債
New KDR
106,130 million yen
50.1%
95.2%
1.08%
5.0 years
Investment corporation bonds (KDR)
23
Negative Goodwill
In addition to the reversal above, New KDR will use “negative goodwill” in the cases below.
• Merger expense• Loss on sales of property, impairment loss on asset, loss on retirement on large-scale repairs, etc. • Dilution of distributions per unit due to flexible interim capital increase• Extraordinary loss such as loss on disaster
Note: “Merger consideration” will be calculated by multiplying the number of investment units (84,750 units) of the surviving investment corporation to be allocated to unitholders of the dissolving investment corporation bythe price of investment unit as of the Merger effective date. “Expected amount” of negative goodwill is an estimate based on the price of investment unit as of October 31, 2017.
How to use “negative goodwill”
Occurrence of “negative goodwill”
B/S after Merger (book value)
Assets
Liabilities
Net assets(including an
amount equivalent to negative goodwill)
AssetsLiabilities
Net assets
B/S before Merger (book value)
Assets(market valuation)
Liabilities(market valuation)
Market valuation of B/S of absorbed investment corporation
Merger consideration (Note )
AssetsLiabilities
Net assets
B/S before Merger (book value)
AssetsLiabilities
Net assets
Reserve and reversal of “negative goodwill”Reserve : Most of negative goodwill (an amount necessary to satisfy the distribution requirement of 90% and over) that is not applied to distributions at the time of the Merger will be reserved as “reserve for temporary difference adjustment” governed by the Ordinance on Accountings of investment corporations.Reversal: As long as a balance remains in the reserve, 1% or more thereof, which is equal to an amount of the initial reserve averaged out in 50 years (100 terms), will be reversed every term and applied to distributions.
Surviving investment
corporationD
issolving investment
corporation
If Merger consideration is smaller than balance between assets (market valuation) and liabilities (market valuation), “negative goodwill” will occur.
⇒ Expected amount: approximately 3,283 million yen
Surviving investment corporation
Amount equivalentto negative goodwill
24
Management Fee Structure of New Investment Corporation (New KDR)
New KDR (March 2018)
JSLKDR
Total assets × 0.3%
Management fee I
Distributable management fee II before deductions × 5.0%
Management fee II
Total assets × 0.45%
Management fee I
NOI × management fee II DPU before deductions × 0.001%
Management fee II
Acquisition price × 1.0% (0.5%)(Note 1)
Acquisition fee
Assignment price × 1.0%
Assignment fee
Total assets × 0.3%
Management fee I Management fee Ⅰ
Distributable management fee II before deductions ×5.0%
Management fee II
Note 1: The figure in parentheses shows the rate in case of acquisition of a real property, etc. or real estate-backed security from or to an interested person.Note 2: The introduction of merger fees to New KDR will be resolved at the unitholders’ meeting to be held on January 25, 2018. The cap rate for merger fees is 1.0%.
Acquisition price × 1.0%
Acquisition fee
Assignment price × 0.5%
Assignment fee
Acquisition price × 1.0%
Acquisition fee Management fee Ⅰ
Assignment price × 0.5%
Assignment fee
Asset management fee structure (before Merger)
Asset management fee structure (after Merger)
Management fee Ⅰ
Expected price of succession × 1.0%
Merger fee (Note 2)
Appendix
26
3.0%
4.0%
5.0%
6.0%
7.0%
0 1,000 2,000 3,000 4,000 5,000
3.0%
4.0%
5.0%
6.0%
7.0%
0 1,000 2,000 3,000 4,000
Correlation between Asset Size and Distribution Yield inJ-REITNew KDR will strive to clear the valuation gap by expanding asset size and aggregate market price through merger.
Asset size and distribution yield
KDR
KDR
New KDR
New KDR
KDR positioning (Note )
Dis
trib
utio
n yi
eld
Dis
trib
utio
n yi
eld
Market cap and distribution yield
Asset size 200 billion yen
Market cap
120 billion yen
Asset size (bl yen)
Market cap (bl yen)
Expansion of asset size and Market Cap
Improvement of stability and liquidity
Reduction of funding costs
Higher credit ratingIncorporation into global index
Positive growth spiral
Note: “Asset size” and “Distribution yield” show figures as of October 31, 2017, based on information disclosed by Nippon Accommodations Fund, Advance Residence Investment Corporation, Kenedix Residential InvestmentCorporation, Comforia Residential Investment Corporation, Samty Residential Investment Corporation, Sekisui House Residential Investment Corporation, Starts Proceed Investment Corporation and Japan Rental HousingInvestments, Inc. (in the order of securities codes). The curve shows a logarithmic trendline.
100 200 300 400 500
100 200 300 400
27
Stable Cash Flow of Healthcare Facilities
New KDR will strive to stabilize profit and efficiently manage portfolios through appropriate monitoring based on strong trust relationships with operators.
Lease agreements are of a long-term and fixed-rent type, which are not impacted by occupancy rate or incomes and expenditures of the facilities, and are ideal for securing stable cash flow.
New KDR will strive to secure stable cash flow with long-term fixed rent lease agreements
Portfolio data of JSL(As of August. 31, 2017)
Investment corporation
Residents
Municipality, etc.
Lump-sum payment upon
admission
Monthly charge
Nursing care compensation
Operator
Fixed rent
Long-term lease
agreement
Continuous monitoring by asset management company
[CATEGORY
NAME][PERCEN
TAGE]
15年以上20年未満
23.5%
10年以上15年未満
36.5%
5年以上10年未満
6.2%
5年未満8.9%
Average
16.2 years
Fixed rent
100%
Occupancy rate
100%
(Remaining years in lease agreement term) (Fixed rent ratio) (Occupancy rate) (Operator diversification)
11companies
20 years≤24.9%
15≥20 years
10≥15 years
5≥10 years
>5 years
Activa24.8%
Nichii Care Palace15.2%
NM Life13.1%
Hasegawa Care Service(Note2)
12.5%
Note Welfare Center8.2%
SOMPO Care Next6.8%
Silver Town4.9%
Benesse Style Care4.2%
Community Net4.2%
Sawayaka Club3.4%
Excellent Care System2.7%
Note 1: “Remaining years in lease agreement term, “ ”Fixed rent ratio,” “Occupancy rate” and “”Operator diversification” were calculated based on the acquisition prices of JSL.Note 2: Company name was changed to HITOWA Care Service Co., Ltd as of November 1, 2017
28
ORE (Operator Real Estate) Strategy in Investment and Management of Healthcare FacilitiesNew KDR will strive to maximize unitholder value through management which values a relationship of trust with operators and support fromSponsor, etc.
Establish relationships of trust with operators Understand management status through
monitoring Maintain facilities through appropriate
management
Roles of JSLP
Own stable facilities over the long term Expand asset size and stabilize portfolios Maximize unitholder value
Roles of JSL
Collect information through diverse networks Provide warehousing functions Support new development deals
Roles of Sponsor and Support Providers
Utilize strengths of JSL, JSLP and Sponsor, etc.
Establish relationships of trust with operators, based on mutual understanding
Establishment of relationships of trust, based on mutual understanding of management philosophy
Appropriate monitoring, considering business characteristics of healthcare facilities
1
Promote supply of healthcare facilities by sharing growth strategies
Correspondence between information from diverse networks and operator needs
Flexible acquisition of new development deals, etc. by utilizing warehousing functions
2
Implement activities to maintain and improve earning power
Maintenance and improvement of asset value with appropriate repair and renovation work
Security of opportunities for internal growth with added-value work Establishment of environment assisting safety and security of residents and users
3
“ORE Strategy” is a JSL strategy under which the asset management company and operators mutually understand operators’ management philosophies, business/facility management status, etc., the investment philosophy, management policy, etc. of the investment corporation in order to establish relationships of trust and to efficiently carry out repair/renovation work for portfolio assets so as to increase asset value, and under which JSL facilitates the acquisition of new properties for the investment corporation in cooperation with operators. This strategy will continued under New KDR as a strength in investment and management.
29
Unitholder Register Administrative Agency
Agreement
Fiscal Agency Agreement
Structure after Merger
Mizuho Trust & Banking Co., Ltd.
Administrative Agent for Accounting Business Asset
Custodian
Provider of Property support-Line Trademark Licenser
General Meeting of Unitholders
Board of Directors
Executive Director : Keisuke SatoKatsue Okuda
Supervisory Director : Osamu ChibaSatoshi OgawaSoichiro Iwao
Accounting Auditor
Ernst & Young ShinNihon LLC
New KDR
Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Trust Bank, Limited
Administrator forUnitholder’s Register
Administrative Agent for Investment Corporation Bonds
Asset Management Agreement
Support Companies
Jukyo HoldingsShinsei Bank
Mitsubishi UFJ Trust and Banking CorporationHASEKO Corporation
LIXIL Group
Administrative Agency agreement /
Asset Custodian Agreement
Asset Management Company
Support-Line Memorandum / Trademark License Agreement
Support Agreement
30
Portfolios of New Investment Corporation (New KDR) (1)
Property Address Acquisition price (million yen)(Note 1)
Expected investment ratio (Note 2)
KDR
KDX Daikanyama Residence Shibuya-ku, Tokyo 4,700 2.4%
KDX Odemma Residence Chuo-ku, Tokyo 1,775 0.9%
KDX Iwamoto-cho Residence Chiyoda-ku, Tokyo 822 0.4%
KDX Bunkyo Sengoku Residence Bunkyo-ku, Tokyo 1,488 0.8%
KDX Azumabashi Residence Sumida-ku, Tokyo 650 0.3%
KDX Shimura Sakaue Residence Itabashi-ku, Tokyo 2,830 1.5%
Cosmo Heim Motosumiyoshi Kawasaki-shi, Kanagawa 1,750 0.9%
KDX Musashi Nakahara Residence Kawasaki-shi, Kanagawa 637 0.3%
KDX Chiba Chuo Residence Chiba-shi, Chiba 1,480 0.8%
KDX Kawaguchi Saiwai-cho Residence Kawaguchi-shi, Saitama 1,150 0.6%
KDX Residence Shirokane I Minato-ku, Tokyo 3,000 1.6%
KDX Residence Shirokane II Minato-ku, Tokyo 2,800 1.4%
KDX Residence Minami-aoyama Minato-ku, Tokyo 2,230 1.2%
KDX Residence Minami-azabu Minato-ku, Tokyo 2,080 1.1%
KDX Residence Shiba Koen Minato-ku, Tokyo 1,781 0.9%
KDX Residence Azabu East Minato-ku, Tokyo 1,560 0.8%
KDX Residence Takanawa Minato-ku, Tokyo 770 0.4%
KDX Residence Nishihara Shibuya-ku, Tokyo 1,450 0.8%
KDX Residence Daikanyama II Shibuya-ku, Tokyo 730 0.4%
KDX Residence Sendagaya Shibuya-ku, Tokyo 650 0.3%
KDX Residence Nihonbashi Suitengu Chuo-ku, Tokyo 3,240 1.7%
KDX Residence Nihonbashi Hakozaki Chuo-ku, Tokyo 1,147 0.6%
KDX Residence Higashi-shinjuku Shinjuku-ku, Tokyo 3,270 1.7%
KDX Residence Yotsuya Shinjuku-ku, Tokyo 2,260 1.2%
KDX Residence Nishi-shinjuku Shinjuku-ku, Tokyo 1,000 0.5%
Property Address Acquisition price (million yen)(Note 1)
Expected investment ratio (Note 2)
KDR
KDX Residence Kagurazaka Shinjuku-ku, Tokyo 720 0.4%
KDX Residence Futako Tamagawa Setagaya-ku, Tokyo 1,250 0.6%
KDX Residence Komazawa Koen Setagaya-ku, Tokyo 920 0.5%
KDX Residence Misyuku Setagaya-ku, Tokyo 760 0.4%
KDX Residence Yoga Setagaya-ku, Tokyo 700 0.4%
KDX Residence Shimouma Setagaya-ku, Tokyo 600 0.3%
Raffine Minami-magome Ota-ku, Tokyo 1,250 0.6%
KDX Residence Yukigaya Otsuka Ota-ku, Tokyo 1,050 0.5%
KDX Residence Denen Chofu Ota-ku, Tokyo 1,000 0.5%
KDX Residence Tamagawa Ota-ku, Tokyo 776 0.4%
KDX Residence Monzennakacho Koto-ku, Tokyo 773 0.4%
KDX Residence Okachimachi Taito-ku, Tokyo 850 0.4%
KDX Residence Moto-asakusa Taito-ku, Tokyo 800 0.4%
KDX Residence Itabashi Honcho Itabashi-ku, Tokyo 620 0.3%
KDX Residence Azusawa Itabashi-ku, Tokyo 550 0.3%
KDX Residence Tobu Nerima Nerima-ku, Tokyo 420 0.2%
KDX Residence Yokohama Kannai Yokohama-shi, Kanagawa 800 0.4%
KDX Residence Miyamaedaira Kawasaki-shi, Kanagawa 999 0.5%
KDX Residence Machida Sagamihara-shi, Kanagawa 1,800 0.9%
KDX Residence Kinshicho Sumida-ku, Tokyo 1,350 0.7%
KDX Residence Nihombashi Hamacho Chuo-ku, Tokyo 996 0.5%
KDX Residence Nihombashi Ningyocho Chuo-ku, Tokyo 530 0.3%
KDX Residence Jiyugaoka Meguro-ku, Tokyo 1,268 0.7%
KDX Residence Togoshi Shinagawa-ku, Tokyo 3,745 1.9%
KDX Residence Shinagawa Seaside Shinagawa-ku, Tokyo 2,593 1.3%
Note 1: Acquisition price with respect to properties owned by KDR are acquisition price and acquisition price with respect to JSL properties is price at which New KDR expected to succeed to such properties as of November 10,2017; such price may be different from actual price of succession by New KDR. Price in the tables rounded off for figures of less than 1 million yen.
Note 2: “Expected investment ratio” shows the acquisition price of each asset as a percentage of total expected acquisition price, rounded to the first decimal place.
31
Portfolios of New Investment Corporation (New KDR) (2)
Property Address Acquisition price (million yen)(Note 1)
Expected investment ratio (Note 2)
KDR
KDX Residence Ojima Koto-ku, Tokyo 1,857 1.0%
KDX Residence Oyama Itabashi-ku, Tokyo 2,679 1.4%
KDX Residence Hanzomon Chiyoda-ku, Tokyo 4,832 2.5%
B-Site Akihabara Chiyoda-ku, Tokyo 850 0.4%
Bureau Kagurazaka Shinjuku-ku, Tokyo 1,360 0.7%
KDX Residence Sendagi Bunkyo-ku, Tokyo 2,200 1.1%
KDX Residence Seijo Setagaya-ku, Tokyo 1,400 0.7%
KDX Residence Akihabara Taito-ku, Tokyo 1,250 0.6%
KDX Residence Iriya Taito-ku, Tokyo 1,062 0.5%
KDX Residence Tachikawa Tachikawa-shi, Tokyo 3,026 1.6%
KDX Residence Tsurumi Yokohama-shi, Kanagawa 1,050 0.5%
KDX Residence Morishita Chitose Sumida-ku, Tokyo 1,100 0.6%
KDX Residence Akasaka Minato-ku, Tokyo 1,150 0.6%
KDX Residence Kanda Chiyoda-ku, Tokyo 700 0.4%
KDX Residence Ebisu Shibuya-ku, Tokyo 2,845 1.5%
KDX Residence Nishi-magome Ota-ku, Tokyo 1,130 0.6%
KDX Residence Nishi-azabu Minato-ku, Tokyo 1,224 0.6%
KDX Residence Azabu Sendaizaka Minato-ku, Tokyo 792 0.4%
KDX Residence Waseda Tsurumaki Shinjuku-ku, Tokyo 561 0.3%
KDX Residence Bunkyo Yushima Bunkyo-ku, Tokyo 695 0.4%
KDX Residence Kamishakujii Nerima-ku, Tokyo 648 0.3%
KDX Residence Shin-otsuka Toshima-ku, Tokyo 764 0.4%
KDX Residence Sakurajosui Suginami-ku, Tokyo 894 0.5%
KDX Residence Ryougoku Sumida-ku, Tokyo 842 0.4%
KDX Residence Toyosu Koto-ku, Tokyo 7,500 3.9%
Property Address Acquisition price (million yen)(Note 1)
Expected investment ratio (Note 2)
KDR
KDX JozenjiDori Residence Sendai-shi, Miyagi 1,015 0.5%
KDX Izumi Residence Nagoya-shi, Aichi 1,120 0.6%
KDX Chihaya Residence Nagoya-shi, Aichi 1,080 0.6%
KDX Sakaisuji Hommachi Residence Osaka-shi, Osaka 2,910 1.5%
KDX Shimmachi Residence Osaka-shi, Osaka 1,015 0.5%
KDX Takarazuka Residence Takarazuka-shi, Hyogo 1,510 0.8%
KDX Shimizu Residence Fukuoka-shi, Fukuoka 1,680 0.9%
KDX Residence Odori Koen Sapporo-shi, Hokkaido 765 0.4%
KDX Residence Kikusui Yojo Sapporo-shi, Hokkaido 830 0.4%
KDX Residence Toyohira Koen Sapporo-shi, Hokkaido 445 0.2%
KDX Residence Ichiban-cho Sendai-shi, Miyagi 530 0.3%
KDX Residence Kotodai Sendai-shi, Miyagi 520 0.3%
KDX Residence Izumi Chuo Sendai-shi, Miyagi 480 0.2%
KDX Residence Higashi-sakura I Nagoya-shi, Aichi 2,350 1.2%
KDX Residence Higashi-sakura II Nagoya-shi, Aichi 900 0.5%
KDX Residence Jingumae Nagoya-shi, Aichi 840 0.4%
KDX Residence Nishi-oji Kyoto-shi, Kyoto 813 0.4%
KDX Residence Saiin Kyoto-shi, Kyoto 440 0.2%
KDX Residence Namba Osaka-shi, Osaka 1,410 0.7%
KDX Residence Namba-minami Osaka-shi, Osaka 1,350 0.7%
KDX Residence Shin-osaka Osaka-shi, Osaka 510 0.3%
KDX Residence Ibaraki I・II Ibaraki-shi, Osaka 1,275 0.7%
KDX Residence Toyonaka-minami Toyonaka-shi, Osaka 740 0.4%
KDX Residence Moriguchi Moriguchi-shi, Osaka 551 0.3%
KDX Residence Sannomiya Kobe-shi, Hyogo 1,080 0.6%
Note 1: Acquisition price with respect to properties owned by KDR are acquisition price and acquisition price with respect to JSL properties is price at which New KDR expected to succeed to such properties as of November 10,2017; such price may be different from actual price of succession by New KDR. Price in the tables rounded off for figures of less than 1 million yen.
Note 2: “Expected investment ratio” shows the acquisition price of each asset as a percentage of total expected acquisition price, rounded to the first decimal place.
32
Portfolios of New Investment Corporation (New KDR) (3)
Property Address Acquisition price (million yen)(Note 1)
Expected investment
ratio (Note 2)
KDR
Ashiya Royal Homes Ashiya-shi, Hyogo 1,360 0.7%
KDX Residence Funairi Saiwai-cho Hiroshima-shi, Hiroshima 588 0.3%
KDX Residence Tenjin-higashi II Fukuoka-shi, Fukuoka 680 0.4%
KDX Residence Nishi Koen Fukuoka-shi, Fukuoka 763 0.4%
KDX Residence Hirao Josui-machi Fukuoka-shi, Fukuoka 760 0.4%
Melody Heim Gotenyama Hirakata-shi, Osaka 400 0.2%
Leopalace Flat Shin-sakae Nagoya-shi, Aichi 3,500 1.8%
KDX Residence Koman Yamate Kobe-shi, Hyogo 973 0.5%
KDX Residence Hommachibashi Osaka-shi, Osaka 3,201 1.7%
KDX Residence Minami-kusatsu Kusatsu-shi, Shiga 1,974 1.0%
KDX Residence Ohori Harbor View Tower Fukuoka-shi, Fukuoka 4,606 2.4%
KDX Residence Minami-sanjo Sapporo-shi, Hokkaido 915 0.5%
Serenite Kita-kyuhoji Osaka-shi, Osaka 1,290 0.7%
Serenite Nishinomiya Hommachi Nishinomiya-shi, Hyogo 617 0.3%
KDX Residence Nishijin Fukuoka-shi, Fukuoka 1,600 0.8%
Subtotal 164,169 85.0%
Property Address Acquisition price (million yen)(Note 1)
Expected investment
ratio (Note 2)
JSL
Joy Stage Hachioji Hachioji-shi, Tokyo 3,710 1.9%
Nichii Home Tama Plaza Kawasaki-shi, Kanagawa 2,830 1.5%
Nichii Home Nakano-Minamidai Nakano-ku, Tokyo 1,780 0.9%
Yuimaru Hijirigaoka Tama-shi, Tokyo 1,120 0.6%
Irise Kamata/Yuseien Ota-ku, Tokyo 1,120 0.6%
Activa Biwa Otsu-shi, Shiga 6,580 3.4%
SOMPO Care LAVIERE Kobe Tarumi Kobe-shi, Hyogo 2,110 1.1%
Granda Mondo Yakujin Nishinomiya-shi, Hyogo 1,190 0.6%
Excellent Nishinomiya Nishinomiya-shi, Hyogo 973 0.5%
Ten Sapporo-shi, Hokkaido 2,650 1.4%
Irise Nishioka Sapporo-shi, Hokkaido 853 0.4%
Sawayaka Sakura Nibankan Akita-shi, Akita 989 0.5%
Alpha Eniwa Station West Exit Redevelopment Building Eniwa-shi, Hokkaido 1,660 0.9%
Gran Hills Ogawarako Kamikita-gun, Aomori 1,380 0.7%
Subtotal 28,945 15.0%
Total 193,114 100.0%
Note 1: Acquisition price with respect to properties owned by KDR are acquisition price and acquisition price with respect to JSL properties is price at which New KDR expected to succeed to such properties as of November 10,2017; such price may be different from actual price of succession by New KDR. Price in the tables rounded off for figures of less than 1 million yen.
Note 2: “Expected investment ratio” shows the acquisition price of each asset as a percentage of total expected acquisition price, rounded to the first decimal place.
33
Overview of Each Investment Corporation
KDR JSL
Investment corporation Kenedix Residential Investment Corporation Japan Senior Living Investment Corporation
Representative (Executive Director) Keisuke Sato Katsue Okuda
Supervisory Director Osamu Chiba / Satoshi Ogawa Soichiro Iwao / Koji Kotaka
Securities code 3278 3460
Listed April 26, 2012 July 29, 2015
Fiscal period January / July February / August
Number of issued investment units(Note ) 349,089 units 84,750 units
Total equity(Note ) 80,132 million yen 15,531 million yen
Asset management company
(representative)
Kenedix Real Estate Fund Management, Inc.
(Masahiko Tajima, President & CEO)
Japan Senior Living Partners, Inc.
(Takashi Fujimura, CEO & President)
Custodian and general administrators Mizuho Trust & Banking Co., LtdMitsubishi UFJ Trust and Banking Corporation
Transfer Agent Sumitomo Mitsui Trust Bank, Limited
Bonds Fiscal Agent Sumitomo Mitsui Trust Bank, Limited -
Note: The figures as of November 10, 2017. Total equity is rounded down to the nearest 100 million.
34
Disclaimer
Notes regarding this document
This document contains forward-looking statements including forecasts, prospects, targets, and plans. These statements are based on certain assumptions about information unavailable at the time of preparation of this document and uncertain factors that may affect future performance, and therefore there is no guarantee that those statements will be realized, and actual results may differsignificantly from those statements.Opinions, prospects, estimates and the like set forth in this document are merely opinions, judgments, etc. of the KDR, JSL, KFM and JSLP formed on the basis of information available at the time this document was prepared, and therefore contain risks and uncertainties.Information provided in this document does not guarantee the accuracy, integrity, appropriateness, validity, etc. of its contents. No warranty is mad that the information included in this document will always be up-to-date.The contents of this document may be changed without any notice.This document was not prepared for the purpose of soliciting investment. Users are responsible for making decisions on investment, based on their own responsibility and judgment.
To unitholders in the United States:
This exchange offer or business combination is made for the securities of a foreign company. The offer is subject to disclosure requirements of a foreign country that are different from those of the United States. Financial statements included in the document, if any, have been prepared in accordance with foreign accounting standards that may not be comparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the federal securities laws, since the issuer is located in a foreign country, and some or all of its officers may be residents of a foreign country. You may not be able to sue a foreign company or its officers in a foreign court for violations of the U.S. securities laws. It may be difficult to compel a foreign company and its affiliates to subject themselves to a U.S. court’s judgment.
You should be aware that the issuer may purchase securities otherwise than under the exchange offer, such as in open market or privately negotiated purchases.